Legal successions and property (anyone know anything)

Man I'm in a situation. As some of you know my mother passed in 2003. She left her home to her heirs, my brother, my sister, and me. At the time we were waiting for insurance payments to pay out the balance of the mortgage. MY sister had already received her checks and she decided that if we werent gonna pay then, because she and my brother had an arguement, SHE WASNT PAYING ANYTHING.

My sister felt that since she didnt live in the house and we did, she shouldnt have to pay (BUT there was no discussion she simply wasnt paying) This put pressure on my brother and I, I couldnt move because I didnt want to stick my brother with all of the house note and he was in the same predicament.

Fast forward to the HURRICANE, now the house has a whole in the roof, my brother called my sister to say she had to pay her 1/3 of the note, Her reply: I'll send my payment, but I'm getting a lawyer. So I was forced to talk to a lawyer as well. He says that my sister was left an asset that came along with an associated debt. Since she never payed on the note (or the insurance) She is not entitled to any part of the insurance.


My sister has since spoken with an attorney and she now wants to get the house appraised (after it is repaired with the insurance she made no payment for) and either be bought out, or sell the house.

OF course, she now after the fact offers to pay all the payments she missed (much like buyng a lottery ticked AFTER knowing the numbers or trying to go back and buy insurance AFTER an accident to cover it.

Is she due any part of the insurance? Can I avoid selling the house?

Of course the insurance check is gonna be cut in the name of my mother's estate. My sister is saying "let's get a new roof and pay out the house" but then she gets a 1/3 share of the house with NO out of pocket expense.

I say, let's use the insurance to fix the house/roof and whatever else needs fixing, then give the balance to the mortgage company and continue to pay whatever the balance is till the house is payed out


I offered to give her $15Gs for her share of the house but she says it's not enough. I then said well get it appraised and I'll give you a third of whatever the value is and work out the rest with my brother seperately.

She feel to appraise the house before repairs would short change her, BUT SHE NEVER EVER Made an insurance payment.

Can she walk away from the responsibility and come back later as if she never left? OF course this is the my sister, and the mother of my nephew, I dont want to short her in any way, but I dont think she's being entirely fair to me, and Fairness is not a 1 say street.

Hopefully someone here knows more on the subject than I do


I figure If the house in fixed condition is worth $150Gs we should subtract the value owed on the house (say $50Gs)

and split the remaining 100Gs as our base value
but since there is the small matter of her NEVER making a payment and making it her decision to walk away and not negotiate anything, I dont think she should share in the insurance that is being used to fix the house

IF it takes say $64,000 to fix the house then her value would be 1/3 of (100k-64k)


Am I wrong? Am I being unfair?

[scruffydog]

Hi
I am sorry to hear of your difficulties.
I notice no one has responded to this post and I have thought a little about it.
It is a deeply personal and private problem and you were brave to air it with us.
Sibling rivalry is surely tested at these times....something I feel sure your mother would not wish to happen.
Whilst your sister may not have cared for her it is clear she is entitled to a share of the equity in the house.
How you go about this is the problem and as she naturally wants everything 'now' it will remain a source of conflict.
It may be the case that you have to buy her out in full according to a correct valuation.
I would expect some people would fight over this....but a last will and testament remains and I feel the advantage is with her as it does not favour one child over another.
It is a difficult time for you...but you will be happy if you do the right thing and take the long way round to owning the property.
Best of luck my friend.
Scruffy

Originally Posted by scruffydog

Hi
I am sorry to hear of your difficulties.
I notice no one has responded to this post and I have thought a little about it.
It is a deeply personal and private problem and you were brave to air it with us.
Sibling rivalry is surely tested at these times....something I feel sure your mother would not wish to happen.
Whilst your sister may not have cared for her it is clear she is entitled to a share of the equity in the house.
How you go about this is the problem and as she naturally wants everything 'now' it will remain a source of conflict.
It may be the case that you have to buy her out in full according to a correct valuation.
I would expect some people would fight over this....but a last will and testament remains and I feel the advantage is with her as it does not favour one child over another.
It is a difficult time for you...but you will be happy if you do the right thing and take the long way round to owning the property.
Best of luck my friend.
Scruffy

Man I really wrote it because I know guys at GS are often experienced in other areas. As far as it being personal, I'm not really phased by it because few here actually KNOW me really.

My thing is I dont wish to short anyone, And I love both my siblings the same, but when my mom died, she left a house note as well as a house. if my sister doesnt pay the note for 2 years, I dont think she should be totally left out, but I dont think she is being fair either.

I wrote figuring someone would know of a "legal" forum similar to Gearslutz

[scruffydog]

Obviously I am not a Soilcitor/Lawer.
But if it is a straight maths problem then it should be simple.
Value of property/estate minus Debts
Devided by three.
This is the start point surely...according to the wishes of your Mum.
So if your sister is not playing ball on debts...she will have too.
The hurricane damage complicates the issue obviously...so I am useless to you.
Best wishes
Rob

[RobR]

You can't win, but you can lose further. I say, turn the other cheek.

[astrovic]

Hi there - I am a lawyer (with a tragic interest in all things rackmountable, class A, fader operated or VU-metered!), but an Australian lawyer so I can give you a lawyer's perspective but not one that relates to US or Louisiana law.

Having said that, succession law pre-dates both Australia and USA to a large extent so I can't imagine your laws differ from ours to any great extent.

I'm a little unsure about what the insurance is. Do I take it the house was insured, so the hurricane damage should be fixed by the house insurance? Also, do I take it that the insurance you were waiting on to pay out the mortgage was some form of life insurance over your mother?

At any rate, the way I usually deal with these kinds of issues is that any money any of you spend in relation to the house is effectively a loan to your mother's estate. This includes insurance premiums, mortgage payments or any other monet spent on protecting the value of the assets. When any assets of the estate are sold, then the sale proceeds should be applied:

First, to repay any mortgages,
Secondly, to repay any loans made to the estate, and
Thirdly, split equally between you, your sister and your brother.

Therefore, if your sister does not want to contribute anything to maintaining the house (whether it be by way of meeting insurance premiums, or "notes" as you Americans apparently call them, or meeting mortgage payments, or anything else), that's fine, but you get reimbursed for all amounts you spend before she gets anything.

Obviously the best way to go is for all costs to be split equally, so that you share the burden, but it doesn't have to be that way.

Bear this in mind also - and I'd take this position if I was advising you sister - as you live in the house, do you pay rent or board? If not, then should you be charged board at a reasonable rate by your mother's estate? I'm guessing your sister's attitude is based on the feeling that if you're living there free of charge, why should she have to pay the upkeep?

The fair approach is to calculate what the fair amount of board would be, and credit that back to the estate. This amount would be taken into account when determined how the equity is to be split.

By using this approach, you can work out what the house is worth now to each of you, based on your respective contributions and obligations, and come up with a figure that is a fair price at which you can pay out your sister.

For example if the house is worth $150K and there is a $50K mortgage, and you and your brother have paid $10K each on upkeep but you should have paid $5k board in the meantime, then the value of the house after the mortgage is repaid is $85K ($150K - $50K - $10K - $10k +$5k). You then split the $85K three ways to work out what you should have to pay to buy your sister out (ie $28,333).

BTW, I'm not convinced by your lawyer's advice that "with an asset comes an associated debt". Here in Australia, until you actually transfer the house down from your mother's estate into the names of the children, your mother's estate remains the owner and the children, whilst having the underlying interest, don't actually "own" anything, nor do they have any debt. But the USA could be different...

Anyway, there's my thoughts. Even if I haven't got the legal position entirely right giving the different country and all, hopefully I've put forward an approach that might get your situation sorted out.

All the best!

[RobR]

US law will stray, state to state, county to county, city to city, town to town, village to village.

Originally Posted by astrovic

Hi there - I am a lawyer (with a tragic interest in all things rackmountable, class A, fader operated or VU-metered!), but an Australian lawyer so I can give you a lawyer's perspective but not one that relates to US or Louisiana law.

Having said that, succession law pre-dates both Australia and USA to a large extent so I can't imagine your laws differ from ours to any great extent.

I'm a little unsure about what the insurance is. Do I take it the house was insured, so the hurricane damage should be fixed by the house insurance? Also, do I take it that the insurance you were waiting on to pay out the mortgage was some form of life insurance over your mother?

At any rate, the way I usually deal with these kinds of issues is that any money any of you spend in relation to the house is effectively a loan to your mother's estate. This includes insurance premiums, mortgage payments or any other monet spent on protecting the value of the assets. When any assets of the estate are sold, then the sale proceeds should be applied:

First, to repay any mortgages,
Secondly, to repay any loans made to the estate, and
Thirdly, split equally between you, your sister and your brother.

Therefore, if your sister does not want to contribute anything to maintaining the house (whether it be by way of meeting insurance premiums, or "notes" as you Americans apparently call them, or meeting mortgage payments, or anything else), that's fine, but you get reimbursed for all amounts you spend before she gets anything.

Obviously the best way to go is for all costs to be split equally, so that you share the burden, but it doesn't have to be that way.

Bear this in mind also - and I'd take this position if I was advising you sister - as you live in the house, do you pay rent or board? If not, then should you be charged board at a reasonable rate by your mother's estate? I'm guessing your sister's attitude is based on the feeling that if you're living there free of charge, why should she have to pay the upkeep?

The fair approach is to calculate what the fair amount of board would be, and credit that back to the estate. This amount would be taken into account when determined how the equity is to be split.

By using this approach, you can work out what the house is worth now to each of you, based on your respective contributions and obligations, and come up with a figure that is a fair price at which you can pay out your sister.

For example if the house is worth $150K and there is a $50K mortgage, and you and your brother have paid $10K each on upkeep but you should have paid $5k board in the meantime, then the value of the house after the mortgage is repaid is $85K ($150K - $50K - $10K - $10k +$5k). You then split the $85K three ways to work out what you should have to pay to buy your sister out (ie $28,333).

BTW, I'm not convinced by your lawyer's advice that "with an asset comes an associated debt". Here in Australia, until you actually transfer the house down from your mother's estate into the names of the children, your mother's estate remains the owner and the children, whilst having the underlying interest, don't actually "own" anything, nor do they have any debt. But the USA could be different...

Anyway, there's my thoughts. Even if I haven't got the legal position entirely right giving the different country and all, hopefully I've put forward an approach that might get your situation sorted out.

All the best!

Ok I understand what you are saying about the house being owned by the estate, BUT the mortgage still has to be paid. What I mean by saying my mother left an associated debt is that: When my mother passed away, there was a balance to be payed on the mortgage. IF we do not pay the the note, the house will be taken. SO it is unfair for one of us to decide, "I refuse to pay" And from the perspective of "renting" the house becase I lived in it, Is paying 1/3 of the mortgage not considered enough?

[nukmusic]

Originally Posted by RobR

US law will stray, state to state, county to county, city to city, town to town, village to village.

ya and Louisiana has the worst......all those old ass laws. Dart, I'll double check with my sister(lawyer). But I know everything must be split equally, even the repair and remaining notes. But since you live in the house, I don't think she can force you to move out and sell it. I also don't think she could stop the insurance company from issuing payment for repairs. But if you do sell it. I believe the settlement would give your sister one-third of the sale, minus the total of what she was supposed to have paid towards the notes, upkeep, repair. etc. What you are going through happens more than you think.

ex:

house is sold for $150g. so thats $50g each of the 3 kids.
but... 2 lived in and maintained the home. Paid out of pocket costs of $30g.
a court order would require that the third child pay one-third of that, $10g.
This would be deducted from their share. $50g - $10 = $40.... and added to the shares of the other 2 kids. Sometimes courts will order more to be paid to the kids that maintained the home. Also check with more than one lawyer.

[RobR]

When I took real estate courses, the broker would always make a joke, "There's State Law, there's Federal Law, and, then, there's Louisiana."

Oh My.

Originally Posted by RobR

When I took real estate courses, the broker would always make a joke, "There's State Law, there's Federal Law, and, then, there's Louisiana."

I heard the same joke in a business law course. (IT's true too)